Saturday, 27 June 2015

Skills are not a quick fix

In the UK, the Confederation of British Industry (CBI - which represents British business organisations - especially larger ones) is asking the government for tax changes in the forthcoming budget to allow further investment in machinery/equipment and in skills development.

Whilst accepting that one of the roles of government is to create the right macro-economic climate to support rising productivity, I am not sure that I accept this 'special pleading'.

UK industry has seen a rise in the number of jobs over the last couple of years - but not a corresponding rise in output .... Productivity appears to have been falling. (It is difficult to be too precise since there is often a lag before employment and output 'catch up' with one another.)

If employment is rising but not output, it suggests that those new jobs are not being used productively - either because the people being employed do not have the right skills to perform productively ... or because the systems and processes in which those people are operating are not designed and operated to be optimally productive.

Even if it is a skills problem, it may be a basic skills problem - requiring fundamental change in the underlying nationals skills infrastructure - or it might be a more temporary problem of 'right skills in wrong places'.

Before asking for 'more money the CBI needs to find the 'root cause' of the skills problem ... and urge the government to address this as part of a longer-term strategy.  A 'quick fix' in an annual budget is either not needed or is not enough.

Saturday, 20 June 2015

What's your timescale?

There are often 'quick fixes' we can apply to problems. There are also often improvements we can make to get yield up or improve throughput.  The problem is that some of these can have negative impact over the longer-term.

Global agriculture seems to be caught in this trap.  Yields per hectare are rising.  Good!  With a growing global population, this is not only desirable - but essential.

However, there is increasing evidence that underlying soil performance is falling.  This means we need more and more 'treatments' to maintain yields (putting costs up) - but it also means that there might come a time when the soil refuses to support effective growth.

So, though we might want to improve agricultural productivity, we need to be wary of the timescale over which we expect improvement to occur - and be sustained. Traditional agricultural practices managed to maintain soil quantity and slowly improving yields over centuries; our need for growth has resulted in massively increased yields - but for how long?

Saturday, 13 June 2015

What are we doing wrong?

Total factor productivity around the globe seems to be slowing.  This is a major problem.

Rising productivity is what fuels increased wealth and well-being - it is what allows poorer nations to catch up to richer nations ... a basic requirement of longer-term political stability.

In developed nations, it is what allows a falling population to afford the pensions of a growing retired class.

If TFP is falling, then - collectively - we are doing something wring .. or not doing something right.

One thing we do is to continually increase regulatory burdens - with the best of intentions, but resulting in smaller firms in particular finding it hard to navigate the bureaucratic minefield.

We also - especially when times are hard - often seem to forget to educate, train and develop the workforce ... increasing their capacity and capability.

Governments work in fits and starts on infrastructure - but often more on 'vanity' projects and 'note grabbers' rather than concentrating on productivity infrastructures.

We need to do more - more consistently.

Now, when I rule the world ...

Saturday, 6 June 2015


We are all good at starting new initiatives, new ventures - and creating new teams or even new departments.  Of course, it is good that can do this speedily and (hopefully) effectively.

The problem is that most of us are not very good at closing down those initiatives, those teams when the job is done - or has proved to be ineffective.

Many organisations thus have the remnants and rumps of what were once effective projects, effective teams - even, of course, effective products ..... things that should have been positively closed down but have been left to 'wither on the vine'.

So, take a look around and see what you should stop doing.